A South Korean billionaire and tech entrepreneur has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a takeover deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not been formally charged yet, but the Seoul Southern District Court has issued an arrest warrant amid concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company characterized the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover bid to hinder another major K-pop agency, Hybe, from acquiring it. SM Entertainment and Hybe are among the largest K-pop firms in South Korea, representing artists like Aespa and BTS, respectively.
Kakao eventually purchased SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun faced similar stock manipulation charges.
Founded in 2010, Kakao is based in Jeju City, with Kim holding approximately a 24% stake in the company, which had over 10,000 employees in 2020. At one point, Kim was recognized as South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following the arrest news, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, noted that this situation could be Kakao’s “biggest crisis,” emphasizing the need for remaining executives to demonstrate the company can operate effectively without its founder.